Airbus profits triple but military plane suffers more turbulence

Airbus profits triple but military plane suffers more turbulence

Airbus today took a new €1.3 billion (RM6.3 billion) hit on its A400M military transport plane, lifting charges on Europe's troubled defence project above €8 billion and clouding higher-than-expected underlying profits.

Airbus said its overall order intake increased to $195.7 billion in 2017 from $166 billion in 2016, bringing the total order book to $1.2 billion at the end of December.

Despite the charge Europe's largest aerospace group reported an 8 per rise in adjusted operating profit for 2017 of €4.25 billion; analysts had forecast just below €4 billion.

The various problems with these production programs have overshadowed what was otherwise a strong year for Airbus in terms of earnings, as global demand for commercial aircraft grows.

Despite persistent engine issues on the A320neo, we continued the production ramp-up and finally delivered a record number of aircraft.

Some 181 A320neo aircraft - a new version of the medium-haul A320 jet with more fuel-efficient engines - were delivered, up from 68 during 2016.

The supplier had had problems with the engines past year, which it fixed, but reported a new issue more recently that could affect 2018 deliveries, Airbus said.

This came despite a €1.3bn charge relating to the A400M military aircraft, after the firm agreed a "re-baselining with government customers" after the programme suffered delays in deliveries. The charge includes €35-million of ongoing legal costs.

But the republic's chief lawyer also said Austria would not consider a new deal with the Eurofighter consortium - which includes Airbus, Britain's BAE Systems and Italy's Leonardo - before compensation had been paid.

The fighter row is one of several investigations over the conduct of Airbus' defence and commercial jetliner activities.

Tom Enders, chief executive of Airbus, said: 'We overachieved on all our 2017 key performance indicators thanks to a very good operational performance, especially in the last quarter.

Airbus said on Thursday it had now reached agreement allowing the export funding to resume on a case-by-case basis.

"As part of Airbus' engagement with the US authorities, the latter have requested information relating to conduct forming part of the SFO/PNF investigation that could fall within USA jurisdiction", Airbus said.

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